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Proposed changes to termination payments

14 June 2017 / Matt Crawford
Issue: 4603 / Categories: Comment & Analysis
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Changes ahead

KEY POINTS

  • Changes to the treatment of termination payments were shelved before the general election but are likely to reappear in a new bill.
  • New concept of ‘post-employment notice pay’ will exclude elements of a payment from the £30 000 exemption.
  • Employers’ class 1 National Insurance will be due on taxable payments.
  • Payments to internationally mobile employees may be taxable if the employee has worked in the UK.

The Finance (No 2) Bill 2017 gave details of proposed changes to the rules on the tax and National Insurance treatment of termination payments. These provisions were removed from the Finance Act 2017 but they are expected to resurface later in the year and the article proceeds on that assumption.

The changes were mooted in a consultation last summer. Many were not replicated in the...

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